Why would investor invest money in a startup?
That was the question i have coming to KL and i had the pleasure to meet the fine people at beam and made everything sound so step by step i was mind blown.
This is important if you want to get invested in your startup because you need to do pre – presentation work.
The mistakes that startups usually do is they turn to investors when they only have around 3 weeks of runway left.
This puts you in a very bad position as :
1) You are showing to the investor your lack of proper accounting in the company.
2) You don’t have as much say because you are desperate.
You need to know that, the investor is putting money in startups expecting a return of some sort, Usually a 3x – 10x of their investment in 8 years.
So they are looking for people and company that is qualified to take the money and make a difference.
So, what’s the alternative?
We can be very diligent about it and forecast how the financials will be like.
That way, we will know that there might be a shortage of money for the next 6 months, and act accordingly.
If you are interested to know more, there is a good book called Venture Deals by brand feld you can check out.